Bamboozled: Major accounting error

Billy Woodward has a good job as an electrician. But for a couple of weeks a year when business is slow, he’s instructed by his employer to stay home and file for unemployment benefits.

So for the past several years, Woodward, 25, has collected unemployment a week here or there, but never for weeks at a stretch.

And certainly never $15,000 worth, records show.

Bamboozled has been here before.

There was the story of Jim Holt, the man who collected more than $19,000 in unemployment benefits after he was laid off from a maintenance job with an entity of the Catholic Diocese of Camden. He was then told he had to repay the benefits because the diocese was a nonprofit religious organization and therefore exempt from paying into the unemployment system. But Holt had been paying into the system all that time, and after Bamboozled got involved, Holt was told he was off the hook for the money.

Then there was Ken Caputo, who was collecting unemployment when he moved from New Jersey to South Carolina. He made several calls to New Jersey and told the state he had moved, but he was told he was still eligible for benefits. Then he was told by the state he had to pay back $17,000 that was wrongly disbursed. After Bamboozled inquired about the case, Caputo was told as long as he doesn’t ever file again in New Jersey, he won’t have to worry about paying the money back.

Now we have Woodward, who has been told to repay nearly $15,000 in wrongly disbursed 2013 unemployment benefits.

What makes the Woodward case different is that records show he never collected $15,000 in benefits. He only collected one week of benefits in August 2013. And the state’s own 1099 form, sent to Woodward for his tax filing, also shows a mere $642 in benefits for the year.

So how can the state’s Department of Labor and Workforce Development say he needs to repay $14,352 in benefits?

Woodward said he’s failed to get to the bottom of it.

“It’s never-ending, and they tell me to keep doing something else or calling and appealing but they don’t answer, and then you stop trying,” the Howell man said. “It’s insane that someone could screw this up so bad. This is my life that someone overlooked.”

ALL MIXED UP

Woodward said he wasn’t sure exactly when he first filed for unemployment in 2013, guessing it was sometime around April. He did receive a payment for that week, on Aug. 1, 2013, according to his unemployment bank card account statement.

After one week of benefits, he said, he went back to work.

Several months later, in the fall, he said he filed for another week of unemployment, but his claim was denied.

“Somehow, someone made a mistake and said I was claiming for the months between the claims,” he said.

He said that was the first time he was notified of a problem.

But it didn’t make sense, Woodward said. He had in his hands the account statement from his unemployment benefits card, which showed only one payment to him, not weekly payments from the time he made the first claim.

Woodward said he never received the second week of benefits he claimed — it was denied — and account statements from his unemployment benefits card support that.

He requested an appeal, which was denied.

In early December 2013, he received a letter from the Appeal Tribunal that said, based on Woodward’s appeal, which was filed on Sept. 23, 2013, it was “imposing a disqualification for benefits from 05/05/13 through 09/07/2013 on the ground that the claimant was discharged for simple misconduct connected with the work.”

Hang on. Woodward was never fired, he said, and he in fact worked and collected a salary all through that time period. And, according to his account with his unemployment benefits card, there were no deposits to his account except for the one on Aug. 1, 2013.

The letter continued with more confusing statements, without explanation, saying he now owed only $6,864 back to DOL.

Woodward said subsequent phone calls to DOL didn’t get him anywhere.

Later in December, he received a similar notice from DOL that said of the overpaid benefits of $14,352, some had been repaid, and he only owed the $6,864.

But then in January, he received a 1099 from the state showing that his total unemployment compensation for 2013 was $624.

Then on Feb. 14, Woodward received a letter from the Treasury Department saying Woodward’s 2013 tax refund of $3,793 was paid back to the state’s DOL for his outstanding debt.

“It’s a joke. Every time I called the number to appeal, it was busy,” Woodward said. “This has been a nightmare with customer service, trying to talk to someone. Now to top it off, they automatically took a $4,000 tax return that I was counting on to pay bills.”

Then there was more fuzzy math. A week after learning his tax refund was taken, Woodward received a DOL document that showed Woodward is actually eligible for more benefits, despite what DOL said he needed to pay back. The notice showed that he has a weekly benefit rate of $624. It said his maximum benefit amount was $16,224, and that he had $14,976 remaining, meaning, over time, he could collect that much in benefits.

The math got even fuzzier. The statement said he could still receive $14,976 in benefits, which equals his total benefit eligibility minus two weeks of payments. Yet, his benefits card statement shows he only received one week of benefits, not two.

When he finally got through on the phone, Woodward said, he got nowhere.

“She was no help. She was nasty and told me that she has nothing to do with them taking my tax refund,” he said.

That’s when Woodward called Bamboozled.

QUICK RESOLUTION

After reviewing Woodward’s account statements and notices from Treasury and DOL, we asked DOL to take a closer look at the case.

In less than 24 hours, Woodward received a phone call from DOL Commissioner Hal Wirth.

“He was very apologetic and he said my check from the tax refund is coming in the mail, and the other week of unemployment is going on my debit card,” Woodward reported. “He pretty much said it was a human error in the system. Someone screwed up and put it in the wrong way and it snowballed from there.”

We then talked to DOL spokesman Brian Murray, who confirmed what Woodward said.
Murray said that once the case was looked at, it was obvious there was a human error, and when someone tried to correct the error in the system, only part of the error was corrected.

That explains why part of the system showed Woodward owing money, while the other part said he was still potentially eligible for benefits and he only received a 1099 for the one payment.

Murray said the mistake was made when Woodward filed for his second claim. The data entered mistakenly showed he was unemployed for all the time back to his first claim, while it should have been entered as a separate and new claim.

“The agent found that error but failed to properly correct it in the data system, so while one part of the error was fixed, not all aspects were caught,” he said. “The data still moved indicating this guy had been working all the time and he was paid the 15 grand that he never got.”

Murray said since March 2011, DOL has caught more than $330 million in fraudulent claims, a number that keeps going up. The department keeps working on anti-fraud efforts, he said, but that didn’t apply to this customer.

“There’s no excuse,” he said. “This one was human error and it happens, but we really believe we should have caught it earlier — when he called us. We’re not happy it took him many weeks and a call to you, which is why the commissioner made a personal phone call.”

And we do appreciate that, as does Woodward.

“It’s a big relief,” he said. “It was so frustrating for me, on my own, to try to deal with this when no one wants to talk to you, no one cares, nobody wants to help you. They wipe their hands clean and say good luck, but it’s their job to fix things.”

And this one was fixed in days. Woodward received a check reimbursing him for his garnished tax refund, and the extra week of unemployment benefits he should have received was added to his state-issued bank card.

We’re grateful that Woodward’s case made it to the highest levels, but we hope future problems like this can be corrected long before they have to make their way up the food chain.